AMR, Southwest lead airlines higher

SAN FRANCISCO (MarketWatch) -- Sharply higher second-quarter profits from AMR Corp. and Southwest Airlines combined with a strong broader market to trigger a rally in the airline sector Wednesday.

The Amex Airline Index ($XAL) jumped 5.4% to close at 52.45 points, with every issue in the benchmark trading well into positive territory.

Southwest
LUV, -0.18%
surged 8.2% to finish at $17.24 after the discount carrier said it more than doubled its earnings on the back of raised ticket prices and record load factor, or the percentage of available seats filled. Low-cost rival JetBlue Airways
JBLU, -0.40%
led percentage gainers, up 9.3% at $22.79.

AMR Corp.
AMR, -5.13%
posted a five-fold surge in profitability, with fuller planes and higher prices helping the world's biggest carrier buck persistently high fuel prices. Shares lagged the rest of the sector, but still ended up 1.1% at $24.62. See full story.

Outside the index, UAL Corp.
UAL, +1.48%
jumped 6.6% to close at $28.56.

A decline in the price of crude oil also provided the group with a tailwind, as traders continued to unwind the safe-haven positions built around the violence in the Middle East and focus on weekly data for clues to the state of U.S. supplies and demand. See full story.

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